Unhedged Are AI stocks the new railroad bonds?
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May 5, 2026 
Robin Wigglesworth, FT Alphaville editor and financial history specialist, discusses historical parallels between 19th-century railway booms and today’s AI-driven market. He compares past tech frenzies with modern AI capex, debates which AI investments may endure, and explains why studying financial history can illuminate current market patterns.
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Railway Boom Was Vastly Larger Than Today's AI Spending
- The 19th-century US railway boom dwarfed today's AI build-out when scaled to GDP, equating to roughly $10tn in modern terms from bond issuance alone.
- Robin Wigglesworth cites Morgan Stanley and historical bond data to show railways involved debt about ten times larger than current hyperscaler capex estimates.
Transformative Technologies Still Trigger Global Crises
- The railway build-out was transformative but produced repeated busts, culminating in a global crisis in 1873 when European investors liquidated US railway bonds.
- Robin explains the 1873 crash started in Austria, forced sales of US bonds, and turned the boom into the Long Depression.
Global Markets Transmit Local Losses Rapidly
- Financial contagion is timeless: losses in one country or asset prompt forced selling elsewhere, linking seemingly unrelated markets.
- Katie Martin highlights how European losses in railway bonds forced US liquidations, a pattern still relevant in global markets today.